Limited Purpose Flexible Spending Account (LPFSA)

If you are enrolled in the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2, you have access to two types of tax-advantaged accounts:

  • A health savings account (HSA)
  • A limited purpose flexible spending account (LPFSA)  You may only use an LPFSA for eligible dental and vision expenses.

You may contribute up to $2,650 per plan year to an LPFSA. The annual amount you choose to contribute is available to you on a debit card up front on January 1st and is taken in equal installments from your regularly-scheduled pays on a pre-tax basis. If you are paid on an academic year (AY) schedule, your FSA deductions will be taken only from your September through April pays. You will not have an FSA deduction taken from any summer earnings you may have.

Important Deadlines

For 2019: Eligible 2019 LPFSA expenses may be incurred between Jan. 1, 2019 – Dec. 31, 2019 or date of termination or loss of benefits-eligibility. You have until 90 days from December 31 (March 30 in 2020), or 90 days from your termination or loss of benefits eligibility date to submit your claims for reimbursement. Any funds remaining in your account after your applicable deadline will be forfeited, so it is important to estimate your expenses carefully.

For 2018: Eligible 2018 LPFSA expenses may be incurred between Jan. 1, 2018 – Mar. 15, 2019 or date of termination or loss of benefits-eligibility. You have until 90 days from December 31 (March 31 in 2019) or 90 days from your termination or loss of benefits eligibility date to submit submit your claims for reimbursement. Any funds remaining in your account after March 31, 2019, will be forfeited, so it is important to estimate your expenses carefully.

How HSAs and LPFSAs work together

All eligible health care expenses – from medical and prescription drug to dental and vision – can be reimbursed from your health savings account. In addition, eligible dental or vision care expenses can be reimbursed from the limited purpose health care FSA, including:

  • Contact lens solution
  • Dental and vision coinsurance and copayments
  • Dental and vision care expenses
  • Dental or vision care services or expenses that are medically necessary, but not covered under your vision or dental plans

Limited purpose health care LPFSA at-a-glance

If you participate in the Purdue Health Plan Plus HSA 1 or Purdue Health Plan Plus HSA 2 and participate in a health savings account (HSA), you can only enroll in the LPFSA, not the standard health care FSA.

The LPFSA allows you to reimburse yourself for eligible dental and vision expenses.
Dental and vision expenses are also eligible under your health savings account, but you cannot claim the same expenses on both accounts.

You cannot submit medical, prescription drug, or over-the-counter medication expenses to your limited purpose health care FSA for reimbursement — those expenses are eligible only for reimbursement from your health savings account.

If you have both an HSA and a limited purpose health care FSA… Can you use your HSA? Can you use your limited purpose
health care FSA?
Eligible medical expenses incurred by you or a qualifying dependent, such as your deductible and coinsurance costs Yes No
Prescription drug expenses incurred by you or a qualifying dependent Yes No
Over-the-counter (OTC) medication expenses incurred by you or a qualifying dependent Yes, with doctor's prescription No. Some over-the-counter medications for dental care and vision may be eligible for reimbursement.
Eligible dental expenses, such as visits to the dentist and orthodontia (unreimbursed expenses only), incurred by you or a qualifying dependent Yes Yes
Eligible vision expenses, such as eyeglasses and contact lenses, incurred by you or a qualifying dependent. (Note that Vision Service Plan (VSP) coverage will continue without change. These would be expenses remaining out of your pocket after the VSP benefit is paid.) Yes Yes

IRS limitations on flexible spending accounts

  • Expenses reimbursed from an FSA cannot be claimed as a medical expense on your tax return.
  • Only expenses actually incurred during the calendar year are eligible for reimbursement. Expenses incurred before or after the eligibility period are not eligible, regardless of when you paid for the expenses. FSAs may not reimburse for future or projected expenses.
  • If you do not use all the pre-tax dollars in your flexible spending account, you forfeit the amount left over. That's an Internal Revenue Service requirement.

Claims process

HSA Bank processes all FSA claims for Purdue University for accounts opened on or after 1/1/19. Your claims will be processed through one of the following methods.

  • Limited Purpose FSA: Standard health care FSA participants receive a debit card that they may use at the place of service to pay for eligible expenses. The card number may also be used when paying for eligible expenses that are billed to you. Most charges for medical services and prescriptions will be substantiated automatically. Retain your receipts in case HSA Bank asks you to provide substantiation for the charge or in case you are audited by the IRS.

    If a debit card transaction is not auto-substantiated, you will receive a letter requesting additional documentation as proof of eligible expense.  You will have 45 days from the receipt of the letter to provide the substantiation via HSA Bank's website, mobile app, mail, or fax.  If you do not provide this documentation, the amount of your unsubstantiated charge(s) will be reported back to you as taxable income, in keeping with instructions from the IRS.Debit cards may only be used for the current year’s FSA until December 31 (or 90 days from your termination or loss of benefits eligibility date).  You may continue to file claims for reimbursement until 90 days after December 31 (March 30 in 2020).

    Debit cards may only be used for the current year’s FSA until December 31 (or 90 days from your termination or loss of benefits eligibility date).  You may continue to file claims for reimbursement until 90 days after December 31 (March 30 in 2020).

  • Reimbursement when debit card is not used: For claims that are not handled with the debt card, you may file your claim for reimbursement until 90 days from December 31 (March 30 in 2020) or 90 days from your termination or loss of benefits eligibility date.
    • For Accounts Opened in 2019
      You have three ways to file your 2019 LPSA claims
      • Online
        • Website:Log in to HSA Bank and click "File A Claim" in the "I Want To..." section on the left side of the page.
        • Mobile App: Log into your account with the HSA Bank Mobile app and tap "Filea Claim".
      • Fax: 855-764-5689
      • Mail: HSA Bank, P.O. Box 2744, Fargo, ND 58108-2744

    • For Accounts Prior to 1/1/19
      You have three ways to file an LPSA claim:
      • Online: Log into PayFlex and go to File a Claim under your Healthcare FSA snapshot in the Finanial Center - My Accounts box
      • Fax: 866-932-2567
      • Mail: PayFlex Systems USA, Inc., P.O. Box 981158, El Paso, TX, 79998-1158

Resources

hsabank

HSA Bank Customer Service
1-800-357-6246
askus@hsabank.com

HSA Bank website

HSA Bank website guide

HSA vs FSA

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